Q2 2020 Centerra Gold Inc Earnings Call

[music].

Greetings and welcome to the Centerra Gold's 2022nd quarter results conference call and webcast. During the presentation. All participants will be in listen only mode. Afterwards, we'll conduct a question and answer session and at that time. If you have a question you can press the one followed by the foreign you telephone.

If you joining us by phone any need to reach an operator, you can press star zero.

And as a reminder, this conference is being recorded Friday July 30, Onest 2020, I'd like to turn it to John Pearson Vice President Investor Relations. Please go ahead Sir.

Thank you operator.

I would like to welcome everyone to Centerra Gold's second quarter results conference call.

We have some really slides, which are available on centerra gold's website to accompany each speaker's remarks.

Today's call is open to all members of the investment community and media.

And following the formal remarks, the operator, we will give the instructions for asking a question and then we will open the full line two questions. Please note that all figures are in us dollars unless otherwise noted.

Joining me today remotely is Scott Perry, President and Chief Executive Officer, Derrick Millman, Chief Financial Officer, Dan days, or Dan Chief operating officer, and use of Raymond Our General counsel.

I would like to caution everyone that certain statements made today, maybe forward looking statements.

And as such our subject to known and unknown risks, which may cause our actual results to differ from those expressed or implied.

Also certain of the measures we will discuss today, our non-GAAP measures. Please refer to our description of non-GAAP measures in the news release and DNA for a more detailed discussion of the material risk.

Assumptions and uncertainties. Please refer to our news release and Mdna issued this morning, along with the unaudited financial statements and note at our other filings all of which can be found on CDR and the company's website at Centerra Gold's Dotcom and now I'll turn the Scott the call.

Over to Scott Perry.

[noise], Thanks, John and good morning, everyone and thanks for dialing into our Q2 earnings conference call.

I hope and wish that everyone is safe and well during these extraordinary times with the cobot 19 pandemic.

James My remark Im just referencing slide five of our accompanying earnings conference call presentation deck.

Okay, and it's the bullet points that first bullet point here, just because the kind of been 19 pandemic, obviously, a extraordinary times I think we as the as a team of the company. We've been very diligent in terms of the preventative measures in the protocols, we put in place and I think it's been serving us well to the best about knowledge all three of our operations currently buyers for.

And so you see that in terms of <unk> operating results out levels of productivity et cetera. So generally speaking we've been a unaffected by the Coke at times in Penn Dennis.

In terms of safety continues to be a primary focus for US you know as loves the coded 19 pandemic the out of the well being the health and safety around places out a number one focus.

In terms of safety, we had a number of milestones in the quarter, but really one of the key notable one was a ox oh, how new operation in Turkey. Just recently achieved 3 million hours 3 million man hours of the lost time incident free operation, which is a fantastic milestones.

For the property and a full credit very expendable to valid should team in Turkey.

Likewise, you can see here in the third bullet 0.1 of the key milestones during the quarter was aucs averages out new gold mining operation out food operation.

Actually declared and achieved commercial production during the quarter. This is being a again that's fantastic milestone we poured first gold in January and to be so quickly declaring commercial production thereafter, I think is very competitive.

In terms the operational results I think it is a great quarter to the company I can see here in the full full appointment produced just under 220000 ounces of gold and just doesn't 19 million pounds of copper. It was an excellent level of a gold production and cost reduction and you can say that really resonates in the bullet points below where if I reckon philosophy.

Good point all in sustaining cost companywide was very competitive EUR 800 photos per ounce and you can see parenthesis. There you know each of our operations, where each producing gold or lower than an all in sustaining cost of $700 per outside I come to 692 calls Brown's at Mt. Milligan 679 knows grounds that offset.

You know very low cost at $537 per hour, so, albeit folks it's doing it's a sort of initial ramp up phase, but already is ah presenting as one of our lowest cost operations.

Finally, I'd say, obviously in terms of profiling gold price environment. This makes for a very high margin business.

If I move to the next slide on slide six this to a address some of the financial highlights.

You can see the first bullet point here, just given that low all in sustaining costs, you know the high level of productivity and the high margins and I referenced earlier you can see that's really slowing for tend to the bottom line profitability and I'll talk to free cash flow, but first bullet point here now net earnings during Q2 was $80.7 million, which equates to two.

He seven cents per share.

When you look into the free cash left him into the second bullet point in the third bullet point. The cash provided by operations was it was a very strong 260, I know windows, but here in the third bullet point of things is really the key takeaway and the business is performing really well just given the current gold price environment the level of production low all in sustaining costs and you can see that's really.

Resonating in terms of that free cash flow generation. So in Q2.

Companywide basis, we generated 160 $969 million a positive free cash only but really I think one of the key takeaways in for emphasis that all of our operations at generating very meaningful positive free cash lets say come towards self generated $157 million a positive free cash flow Mount Milligan General.

Right, it's $34 million positive free cash flow and what I was most placement is offset any just declared commercial production, but in its first sort of stub quarter of commercial production, that's already generating positive free cash like $5 million and I think this.

This presents well in terms of where our business is going as we move forward here quarter over quarter, we're expecting in a meaningful progress it increases in production from offsets and that's kind of put us in really good stead to see a you know growing free cash flows are coming out of Turkey.

<unk> bullet point here, just given the strong with what profitability strong free cash flows you can see a one of the things that Darren out Chief Financial Officer has been very focused on eliminating older debt on our balance sheet and is now finished the quarter was a debt free balance sheet, which I think presents a really well and I think it's a very competitive balance sheet religious valla comparative to agree.

So we finished the quarter with a net cash position and $212 million and a if you take into account now available credit lines. We now have a total liquidity of $712 million. So very strong treasury position and obviously you have physicians out business very well.

Moving forward.

The other fit bullet point here, we continue to maintain a guidance, which as you know originally issued at the beginning this year as I mentioned the outset, you haven't seen any meaningful impact in terms. The code bid 19 pandemic. So no. We didn't want draft guidance would actually continued to maintain and reiterate that guidance.

And moving forward lots lots of <unk> point of reference here is that dividend shareholders may have noted that we've now increased a quarterly dividend by 25% on a go forward basis going to be looking to maintain that quarterly dividend at a five cents a share.

Last thing I'll reference on the slide is just the a the charts here the bought and I think it just speaks to some of the out of the bullet points above that you just look at where our business is going and I think its a.

Scenario of the fundamentals of strengthening in a quarter over quarter, just given the rising gold price environment, but you know we're also benefiting from a lot of the devaluation of the same than they are local currencies in terms of jurisdictions, where we operate as well as a lower diesel fuel price environment. So the margins that were seeing enough business now.

Essentially the had the highest margins and I personally have seen a in the five years and I think when the company. So just looking at charts are moving from left to right. You can see control. We know we had a fantastic Q1, but in Q2 here, it's been even better or more than anything because of the high gold price, but you can see come towards the quarter over quarter, increasing free cash.

Ashland $157 million in Q2, likewise at Mt. Milligan, you'll see the growth quarter over quarter that likewise offset against the down new operating mine and Turkey, and Im very pleased to see that already transitioning to positive free cash flow and as I mentioned earlier as we move forward over the course of this year, we are expecting a meaningful progress.

Quarter over quarter increase in gold production, so that's going to and bode well in terms of where oxide or profitability and free cash flow is.

Going to be going here in Q3 in Q4, and then obviously you know it'll it'll resonates in the child there in the bottom right in terms of the company wants free cash and again I think that was a very competitive sort of PLD peer leading liberal free cash flow to the company generating 160 mine $69 million a positive free cash flow.

Just maybe on slide seven.

<unk> you know again, just focusing on the free cash like a theme.

To the chart here in the top lastly, the typical waterfall charges illustrating.

The level of free cash flow that was generated by the operating mines. So you can see all three mines together generated.

$294 million of free cash lenses. So the first six months into she is on a year to date basis and the Red Decrements you can just see how we've been deploying that cash life. So the first decrement. They obviously one of that keep focus has been a you know eliminating or any sort of debt facilities on balance sheet. As I mentioned earlier now finished the quarter with a debt free balance sheet.

Saving also being a rig distributed a $17 million in terms of dividend distributions and then you can see the remaining decrement, especially about developing projects corporate Jane heightened exploration.

I referenced a child in the bottom left again I've spoken to these numbers you know that positive free cash flow, but whenever I'm forgetting as China I like to talk to a 2019. So when you look at Q2 Q3 Q4, you can see the level of positive free cash when they were generating on a companywide basis was a relatively modest.

You can see the significant step up that took place in Q1 or 2020, and so what I like the references in 2019, obviously the company. We're very focused on the construction of offset instead of one of the positive free cash flow generating from Colm turn Mount Milligan, we're using that free cash flows to finance, the construction and offsets but as we.

We exited 2019 construction was essentially pretty close to being complete.

So you can see the immediate step up in a positive free cash learn Q1.

2020 that step up you know, it's even more pronounced when you look at the Q2 result at $169 million as opposed to free cash like because obviously offset may no longer construction is now transition.

Operations with quick mission production and as you saw an accident year results offset was actually generating positive free cash flow. So again I think this puts us in a really good stead bodes really well, but what we can expect in terms of Centerra is a go forward profile as Alex is gonna be increasingly contributing.

Meaningful positive free cash flow and again this puts us in really good stead as we move forward here and last point I'd references I realized gold price during the quarter was just as a $1600 per ounce. Obviously, we're in a much stronger gold price environment as we speak so if that does continue against bodes really well for wear out profitability in positive.

Cash flow is going.

The bottom right just speaks to the debt free balance sheet and I spoke to earlier I can see year over year. He was being very aggressively paying down debt and I would now successfully achieved debt free balance sheet and finishing the quarter the net cash balance up $212 million.

With that I'm now going to look for possible over to 10 days iden Who's our chief operating officer, and then we'll expand a bit more in some of the operational highlights. So then please.

Thanks Scott.

Good morning, everyone. Please please move to slide nine.

Our Q2 operational highlights starting with safety and we have a number of highlights in April both come astronauts suit both achieved a one year lost time injury free.

I couldnt or where you have 900 contractors, they've just achieve two years without a lost time incident.

And then add to in July and August sued the 1100 strong workforce, there had 3 million man hours without an LTI.

Oh. This is a majority of these hours work during the very difficult winter, we had through construction and with all of the majority of new employees. So we feel very very proud to have that operation.

On the production front, we had a very strong quarter, we produced 219692 ounces of gold and 19.1 million pounds of copper at an all in sustaining cost.

$804 per ounce sold.

In terms of the Q2 results by operation.

Tore continues to produce at a steady rate, we're blending the cutback 19 or feed from the stockpile.

In the quarter, we had a recovery rate of 84%, which was a very strong.

On the covert front in Kurdistan It was substantially under control in April and May.

In the country due to strong measures taken by the government. Although recently there has been a large increasing cases in Kurdistan.

Due to the remoteness of our operations. The company is able to tasking quarantine employees and contractors that are off sites quarantine facility before going to the mine site.

This has allowed us to the best of our knowledge.

The property virus free.

On the operating supplies, we've built up a in case of interruptions and we do have strong support from government to continue operations.

Oh come toward the second quarter produced 173245 ounces.

That's what they poured at an all in sustaining cost of 696.

Hi, This site did have some large capital equipment purchases in the quarter and will benefit from that long into the future.

We finalize their new design for the Lisi waste dump in the quarter.

Taking into account all the learning lessons from the tragic failure that we had.

This was submitted to government in the quarter and just the past week, we did receive a or approval from the government to return to the leasing waste, Tom, which we'll see us get back up to a planned tonnages for cutback 20 in Q3, given the the benefit from the haulage profiles the reader.

Do still haulage distance and the resulting efficiencies.

Tim door generated 156.9 million free cash flow in Q2 and that Brad brought our year to date free cash flow to 253 million.

Taking into account be successful drilling campaign of 2018 2019 couldn't or is on track to release, an updated 40 311 Technical report this fall validating that its mine it really is a tier one mine.

[noise] shifting over to Mount Milligan covered in northern British Columbia is very much under control. We continue to keep a strong disciplined according to government guidelines, which has helped us running at full capacity since late may.

We did have two weeks, where we shut down the mine, but we also brought the mill down for a full maintenance shut in April which set the site up for success and we've been able to run that our full complement of employees sense.

The we achieved a throughput average in the quarter or 48000 tonnes per day.

Which reflected a planned shutdown for the mill that we did.

But we also achieved a record throughput tonnage mark in June exceeding 63500 tonnes per day, along with excellent recovery of both copper and gold.

So in the quarter Mount Milligan produced 35.

A thousand 656 ounces of gold and all in sustaining cost of a very strong 679, and the produced a 19.1 million pounds of copper.

On the process water topic, a we had a very wet spring a and it's been continuing to be cool and wet. So we have ample water to run at full capacity.

The end of June we had 6 million cubic meters of water and inventory and the that's continued to build so we continue to pursue medium and long term solutions I will give us ample water tough no impacts on operations.

Milligan generated $34 million and free cash flow in the quarter and 56 million for the year.

Hi, tracksuit or new mine as Scott mentioned, a first gold poor was at the end of January and we achieved commercial production may 31.

Covance situation in Turkey is stable as a country executed a full control opening in April 15, our mine has been operating a it did have two weeks of interruption of for the first two weeks of April, but there's been little to no effect on operations since that time.

Gold production front. So we did 10791 ounces for the quarter at an all in sustaining cost of 537 per ounce.

For a one month of commercial production.

Even as we continue to operate ramp up the operation generated 13.5 million in cash from operations and 5 million free cash flow in the quarter.

Go over to slide 10, we can talk about our operational key focus.

For 2020, we continue to focus on improving our safety performance, we've engaged some subject matter experts and adjust ourselves to improve our controls, especially of key risks at Oxford, where you have ramped up commercial production in mind tons crushed ore placed on the heap energy.

CDR plant is running as design.

Subsequently the heap willing keep increasing its leaching of ounces as per our plans.

By the end of Q2, we did have 1.2 million tons stacked on the heat under irrigation and a large ore stockpile waiting for crushing and placement.

For 2020 Mt. Milligans team is focused on achieving consistent and improved mill throughput and recovery and is getting a stronger handle on the plant mechanical availability.

The operations team also is taking steps to improve its cost performance throughout the company. We are taking advantage of this lower commodity pricing to build our inventories at Mt. Milligan, we have flattened organizational structure, a weve scrutinized or rentals and all call contracts as well as improving a mine productivity.

Cool doors on track to deliver its updated 43, one on one in the fall of 2020.

A little bit converting a meaningful portion of our measured and indicated resources into reserves and showcasing an extended mine life.

Finally, we continue brownfield exploration, where the planned $32 million investment company wide, including 20 million had come to our [noise].

Move over to slide 11.

This is a graph of our water inventory in the T.S. South and as you can see we have such a substantial inventory as compared to the levels at the same time in the previous three years.

On slide 12, these are a photos of Oxford.

Though including a last fall's mining heap leach pad and facilities as you can see there's a there's blue sky over the site.

Now I'll turn the call over to down.

Thanks, Dan and a morning, everyone of those following on now.

Investor deck I'm on slide 14.

Centera recorded 412 mean in revenue during the quarter. This consisted of 346 million in gold so.

40 meet in copper sales and 26 mean method molybdenum business unit.

During the quarter, the Companys average gold price realized with 600, 1600, $20 per ounce and $2 and seeks panda copper.

In the quarter, we sold 217000 ounces of gold 170000 ounces attributable to come to or 35000 ounces from Mt. Milligan in 12000 ounces go 12000 gold ounces being sold at Oxford.

As previously mentioned bought Scott and Dan, Oxford achieved commercial production on my 30 coast.

In comparison.

So probably you caught up.

Gold ounces sold had an increased by 10% and a seven 7% increase in comparison to the first quarter of 2020.

We saw 19.3 million pounds of copper a slight increase in comparison to the probably you quota.

I just move out of Islam thing.

Net earnings of 80.7 mean was recorded in the first quarter.

This included a 17.1 million noncash adjustment to close so I <unk> closed sought asset retirement obligation.

The expenses associated with the movement in the underlying discount rates with reference to U.S. and Canadian Treasury Bond rights. There was no change to the underlying activities required to remediate the properties.

The adjusted earnings after excluding the non cash <unk> expense was 97 point I mean.

The adjusted earnings per share for the quarter was 33 cents.

From a consolidated cost perspective, centera in a quota production costs with $410 per ounce and all in sustaining cost at $804 per ounce.

At an asset level comfortable recorded all in sustaining costs of $696 per ounce well Mount Milligan recorded an all in sustaining costs of $679 per ounce for the quarter.

For the month of June Oxy recorded an all in sustaining cost at $537 per ounce.

I'd Ola operations recorded significant betemit in cash provided by operations.

I'm told recorded $220 million in cash from operations, a 138% increase.

<unk> Milligan recorded 42 mean opt for a 158% increase from operations with Oxy contributing 13 meeting the quota.

This translated to 160 mean mean dollars in consolidated free cash flow for the quarter with off to delivering five meat free cash flow while steel in the early phase that ramp up.

You did <unk> the company generated 246 managed free cash flow.

As noted in the bottom left hand title Centera <unk> all of its debt and finish with 1200 and a 212 mean in cash 712 needed time to liquidity.

On slide 15, it also refer you to the bottom right and shot.

Year to date. The company is produced 410000 ounces of gold tracking very well to achieve go to achieve guidance as opposite ramps up in the second half with 2020.

Cost you today also tracking well with all in sustaining cost at $804 per ounce below the current got a tranche.

In the second half of 2020, the company expects to come to what prices more lower grade material than in the first half. The 2020, but also expects an increase in production from Oxys mine. The obviously in mind as it continues to ramp up it's called production.

Full year gold production going into 2020 is being maintained between 740000 ounces to 820000 ounces for the year.

Year to date, the company's sneak 166 million on capital expenditure slightly below target with the remainder expected to being code in the second half is the year.

Total capex for 2020 is God its 415 million.

Given the financial strength of the company and free cash flow generation now from all three mines. They sent terrible increased quarterly dividend to five cents for the quarter <unk> at 25% increase an ex expected to be at these consistent level quarter on quarter, well still subject to regular book Board approvals.

With that I'll pass it back to spot.

Thanks, Darren and a of the Cubs look to wrap up the presentation here on slide number seven team just referencing the a the top left quadrant here just a couple equal appointment a reference obviously the first bullet point as Darren just spoke to this is our guidance and just gives you didnt appreciation grouse go tends to that gold output that montagna. She is.

Looking up to 820000 ounces of gold at an all in sustaining called lows $820 per ounce Ah you know obviously in the prevailing gold price environment. This is going to present, very well and sometimes without profitability and ongoing on free cash flow generation potential.

As with reference here throughout the deck you know the second bullet point here, we had a very strong competitive quarter good level of gold output and again at a very competitive all in sustaining cost that obviously, a you know really resonated here in the fed bullet point, you'll see that flowing through in terms that profitability and free cash flow generation I think it was a peer leading result in terms the quarterly free cash flow generation and Uh huh.

<unk> six 9 million, though.

Fourth bullet point, you can see that and tend to have been deploying that cash been very focused on a <unk> you know presenting a a debt free balance sheet, but now achieved that here in Q2, finishing the quarter. The net cash position those $212 million. Then if you take into account now available credit facility capacity as Darren mentioned, we had another $700 million.

The total treasury liquidity to certainly in a internally funded business model and moving forward.

The fifth bullet point here just in terms of the dividend.

As Darren just mentioned near the board declared a a 25 just an increase in a quarterly dividend increases of five cents push or per share.

This is a quarterly dividend that we expect to be a maintaining a moving forward that in the last bullet point. He had been spikes in this area everything you know we continue to be on track the releasing a compose new 43, one to one life of mine a technical report me talking to release that in the fall on a this year and with that.

He was looking to the a meaningful portion of the measured and indicated our results increase that we announced back in March this year, so looking to convert a meaningful portion of that tourism category and that's kind of allowance to.

Showcase a a meaningful expansion income tolls lenient delineated asset reserve life moving forward.

Tens of the chart here in the top right.

We now, but I think sets of the $1.1 billion of opposed you retained earnings and he just looking to history. There in terms of the Blue segment on these Ah columns and in this chart you can see some terras at a very good history in terms of the profitability, obviously growing that retained earning pounds, regardless of whether being in the prevailing gold price cycle, which is illustrated.

By the Red line shot and then what I think there's one of the key takeaways from the quarter is the charts at the bottom. This slide you can say at each of though operations been producing positive free cash flow, but what I, what I'm very pleased with business. When you look at the quarter over quarter progression and each operation older operations are showing very meaningful improvements in their profitability in that positive free.

Cash flow and that reflects the underlying productivity the underlying cost efficiency, but also just the benefit of this a the hyatt gold price environment that went benefiting foam and as Darren mentioned that offset we're expecting a meaningful progress it increases and the gold output profile from offset so again, that's going to potentially present very well.

In terms of winter out profitability and free cash flow generation is going in the out in the back off the second household Michelle.

With that I'll look to wrap up the presentation that but what I'd like to doing now, possibly pull back from the operator, and making or we can move into a cure a nice session. Operator, if I can possibly you. Please.

Certainly if you like to register question you compress the one followed by the forward your telephone and you'll hear a three tone problem technology request, if you'd like to withdraw. Your question you can press one three.

And again that is 140 queue up.

And the first questions from line of price Adams from CNBC is good.

Hi, Good morning, Scott and same thanks for taking my questions I have to operational question.

Firstly, the big drive that come to all coming from the stockpile, though where a tick under four grams per tonne and the stockpiled override is 1.8 grams a ton my understanding in that context. My question is for how long does that elevated right profile sustainable and what's your great outlook for the second half.

Thanks, Brian.

I'll give that quoted that I'm, sorry give you a question to all gone out Chief operating officer.

Dan do you want to touch on that just in terms of the different categories and stockpiles, we have and some of the 1.8 grams. Good price touched on but also maybe to speak to some of the positive grade reconciliation that missing on the high grade in the medium grade.

Absolutely okay. Thanks, Bryce it's good question.

First we have a large stockpile I'm actually in our life of mine plan you know, we see that we end up knowing for a couple of years. After the end of the mine life. So we do have a very large low grade stop stockpile set aside our cut off grade is a 0.8.

Of the Graham so so when you see the averages the 1.8, that's the averaging over the whole thing. So our second half as Darren indicated we will be lowering the grade or slightly but were blending both our high grade medium grade and or whatever amount of our low grade that we want to put in.

In order to maximize our recoveries and and make our plans through to the end of feeding the stockpile. So so to answer your question, we will still be will be lower than the second quarter. That's our current plan right now, but we have a lot of flexibility depending on how much of our are very high grade.

Scott alluded to also we've been seeing some very good positive grade reconciliation is in our and our high grade stockpile.

And and that we anticipate that probably to go forward, but we don't we don't budget for that so those are additional ounces, we ended up getting on a regular basis.

I think I got it so for the second half you think it wouldn't normalize back to sort of Q1 levels is that a good god to use.

We were targeting guidance, we're still believe we're going to be within guidance. So yeah. It's a it's it's certainly back closer to the to the quarter one yeah.

My second question right to Mount Milligan unit cost, so 2020 cost per ton for mining and milling continue to demonstrate significant improvement over the 29 team levels now could you touch on and remind me what the you know the key drivers off of that cost improvement.

[noise] well whatever that's good question Scott I can dig the swine going first of all our our new general manager from the he's been there your in house, who has been doing an excellent excellent job just looking for efficiencies and we brought in different experts to do that so it's on.

<unk> they've they've also benefited from the the lower diesel fuel price, which is one of our major cost drivers and he's flatten his organizational structure. So some of the labor costs are down so you know and overall.

He's he's found some efficiencies in mining so we were anticipating a continued benefit on them on the mining side.

And to have significant is the Canadian dollar for those unit costs.

Did not not highly unless it's affected by the the oil price all or labor costs, there and do you know we buy.

So much on a percent locally so.

Got it okay. That's it for me thanks for taking the questions I talked a little Vincent just.

Thanks.

The next questions from line of Dalton Bretaa from Canaccord Genuity Scott.

Thank you good morning, everybody.

I'd like to talk a little bit about this october situation that seems to be escalating in Pakistan and potentially around controller.

More specifically I'm trying to understand the implications on.

You are 2021 production profile, so any year to date, you've only mind 585000 tonnes of ore and that's it that's been a function to haul distances and so on but if you're going to be third healing rates going forward to keep the headcount down yes, one of the implications for 2021, I mean, what's the plan to keep them outside there.

I think built and I'm, Dan you want to address den kind of it you addressed that but then just also touching the fact that we never scheduling to mine any all this year and exclusively on waste money, but then I'll positivity.

Yeah. Thanks, Thanks, Dalton very good question and yes, we have been a affected on our to our total mine tons, but mostly due to our terrible incident in lease which caused us to have to haul from cut back a 20, which is our we're very high up in a in one ridge down to our central Valley, which greatly extended our whole.

Distances.

And another complication that we've been having that we're getting through now is much of that whole distances is out of the maximum.

10, a 10% grade and during the past few months. This is our snowy season in the spring and so what we've lost a sometimes just from weather conditions slippery slippery conditions. So we we believe we're coming around the corner now now that we've now that we've.

Got our permits to go back and Lisi and we've also come down quite a ways on that caught back up more than 100 meters down so would do it where we're looking looking much better DMT implications are right now we were not going to be a mining any or a in the remainder of this year and very little in the first two quarters of of next year.

So it's all about the release of or what we've done as we've looked at our mine plans and we'll see drilling results. We have adjusted our mine plans. So we're really seeing substantially similar ounce production for 2020 with our actuals that we know up to today as was in the the original.

A 40 311 life of mine plans that to that that is public.

That does so honestly.

Sorry go ahead sorry.

And then then the misspoke little bit when he said, we're seeing a you know a consistent level of production in 2020, I think dens, referring to 2021. The you know the success, we've had an alibi sorry, a little putting what have you yeah Weve tends about mine plan, which is drop right now be releasing that in the fall this year, but in terms of how would recalibrating that.

We are seeing or similar level of gold production in 2021, which is similar all consistent with what was in the original 43, one of the ones that exploration success that has alleviated any challenges that we may be facing right now in terms of mining productivity levels.

Okay, Great. So 2021 production isn't that rest of sites that you maybe mining last or no. That's it.

Correct.

And those kinds of padding and I'm being repetitive I apologize, but in our original plans. This year will notice we run even scheduled green mining any all the plan always for this year I, even pre pandemic was alluding to be exclusively treating all from al stockpile inventory and tens of and mining activity was exclusively focused on waste.

Morning.

Right now I understand that but I you know I'm, just wondering where the or 2021 will come from so that's all sulfide ore as well.

For the first to the put off of 2021 is from stockpile ore and then as we sort of increasingly moving to later Q3 Q4, then it will release them all summer cut back 21.

Understood. Okay, and then just maybe one more question on the that issues and the impact on your workforce. There is that is that assumption of you actually catching it before the mine gate and quarantining people or are you actually seeing absenteeism up as law, just given increasing rates.

And then you want to take lightly.

Yeah, I'd be a happy do yes, well it there is a little bit of absenteeism due to all of a family stresses when obviously when when family members are affected a either moderately or severely a we can have people, calling in and and being sick, but a majority is that on our screening process where were.

Very strict we for most of up until now. We then we still do now and we test people twice and so that's picked up a lot of ER positive cases, and because of that if they were corn teamed with other people. Those other people even will go off for two weeks longer because they had exposure to someone who.

Just tested positive so we've been very strict.

Which did have done effect and some of our crew changes because we anticipated circa 30, 40 people coming up and and if one or two there's one was positive then all all 45 for example, so we've adjusted our strategies since February two a you know account for the different changes but.

But so we're we're feeling positive Oh, we continue to feel positive that we can operate through this time and Oh, we're getting great cooperation from government when we've had different challenges.

Okay, Great just maybe one last ones, maybe I'll jump back in queue, so that auto to see I understand the the leach kinetics, but year to date, you're just 19% of the low end a guidance from a production perspective is that in line with your planting lately with thinking.

And I couldn't yourselves and I think what I've been a representing <unk> to the investments we need is that what you know, but back when we were sort of going to speak with <unk> capital markets investments coming in Q2, as I said, you're going to see that Q2 production will be double what we achieved in Q1 and the and then here in Q3 again on expense.

And that will be producing more than double what we produced in Q2.

For example, if you're looking on guide and you'd be expecting us to be producing let's put it in excess of 10000 ounces per month here in the back half and this year and I I can confirm that we already are already achieved that level of run rate here in the months to July at offset so it's going to be a very meaningful.

Progressive ramp up in gold production and it's progressing well.

That's great. Thank you guys I'll jump back in Korea.

The next questions from the line of Mike Malone and from Bank of America Scott.

Oh Morningstar and everyone just had a question on greenstone Scott.

I'm sure you noticed a I am gold moving ahead with co take all.

Here's a 1900 dollar gold price further IR, which was interesting.

Our high price just wondering what Oh, what gold alert area.

What's the status. This project is Ah Ah. Thanks.

And it looks like Michael the question.

No change in stated they did both about organic growth projects. We obviously have the commenced project in British Columbia, and then we have the greenstone joint venture project going on in Ontario.

In terms of the that the economic that we've been looking at in terms of out prior.

Economic assessment from come out perspective.

Al boardroom setting or we're not seeing a value proposition are ready to retire and that would compel the board to to make the proceeds decision or construction decision.

And that that continues to be the case, so as I look at a net cost of this year and moving into that next year in a consistent route guide and I personally don't see it's making a construction decision on either about a project.

Okay. Thank you.

The next questions from line of Mike Parkin from National Bank. Please go ahead.

Hi, guys. Congrats on a really solid quarter or just wondering for you you mentioned, you're continuing to progress on the long term water.

Solution for Mt. Milligan is there any major milestone that we should be watching for in the back half the year.

[noise] used to do you want to do you want to address that.

Sure Scott.

The milestones.

I wouldn't say, there's a milestone we are having a formal application and we expect to.

File more details materials in analyses to support all the water sources that we're looking for.

But in terms of milestone I don't I don't see.

Anything on the long term, it's taking a long yet but as you can appreciate your time.

Oh relatively long process in terms of consultation with regulators and does this nation. So.

That's not all I can say on on the long term, we are looking at potentially extending current a medium term water sources that we have.

But again, that's all that's all part of the process.

Okay.

And then just one are there a follow up to Bryce. This question on the grade performance.

I can't tour in the second quarter can you tell us what your internal budget was I just have a sense of like what that positive reconciliation.

Dr Wise.

One thing I can Mike <unk> as a matter of fact, if I try to never quite what our internal budget numbers, though because you can imagine budgets are always more of a stretch target relative to guidance, which is somewhat discounted.

No I don't think <unk> position displays that Mike.

All right just happy to see that it continues alright, thanks, very much and congrats on the core thanks.

The next questions from line Trevor Turnbull with Scotiabank. Please go ahead.

Yeah. Thanks, maybe just a quick kind of housekeeping question on unlike Corona virus set related.

Questions you addressed a minute ago I was just wondering does the current Republic have any sort of travel restrictions that makes it hard to either bring in people that time that you need is consultants for coombe tore or even people on rotation that are trying to come in from other countries and just how are you addressing that.

Hi, Dan you want to take that please.

Yes, very happy too.

Yes, certainly since the beginning of the <unk> government.

Greatly restricted a regular flights.

They did repatriate a lot of their nationals from our own around the world and that's really what brought the virus in in terms of the government made it clear <unk> more than two months ago that any any mining company or business that required.

There are ex pats to come in the the approved that.

But we have not taken advantage of that we are we did not want to be contributing to any increase. So we've we've dramatically decreased the number of ex pats that we have in country, but we've learned very well to managed from a distance and just as we had been hit doing here in Canada in Toronto.

So we don't see any effect right now on that in terms of consultants. We have had some small delays in a few of our capital projects, but we've been now been able to bring in the consultants require required for both the a different construction capital projects. So we have and we've had define.

The you know different a different ways to be able to complete or 43, one on one and have all the consultants sign off support. So so we're we're looking okay in terms of our shift changes et cetera.

We've extended our stay at the mine site, which just makes it easier to do the screening.

But we've been able to shift in and out people us as we require.

Okay. You just mentioned the 43, one on one and you've said that's coming out. This fall any is tighter Ty I mean can you tell us if that's going to be Q3, Q4, any sense of better timing on that.

Dan one and I take that Trevor I don't think we can give you any specific you know from a timing I'm not we'd set up board meeting, yet, obviously and you intend to discuss the board.

Yeah. The board wants to make sure that we no pictures that are very high quality product just giving you.

And given what we've been a referencing and we still don't have a steep climb on in terms of them, they're going to cope with the board and have a board meeting et cetera. So I don't think we can address that question.

Okay.

Then the other thing I wanted to ask about whom tour and with respect to the new trucks and they increase to the fleet.

I think you said there was 11 trucks getting added what does that kind of workout to in terms of increased haulage capacity that you've got.

Compared to the existing fleet.

Dental intuitively.

Yeah, no no problem sort our existing fleet.

It's just it was just shy of 100 trucks or two thirds being a seveneighty lines. How we're we're adding and move we're look to be weve, adding 11 here so that would be a on the adding about 10% to our capabilities and then we'll we'll be adding additional equipment most likely in as we move for.

And we'll see 43, one on one.

And.

With respect to those those trucks, obviously it increases your ability.

It tend to move everything but.

You are also.

Facing some of these issues as you alluded to earlier with the with the relocation of the waste stumped is if some of the new fleets excess capacity is that actually getting.

You know is that is that a way of mitigating some of the longer haulage distances or is or is that truly all say, 10% a increase in in capacity or is some of that eroded by by the longer haulage distances.

Yes, certainly you're correct. So some as we we are planning to move more tons per year, but but not not 10% more tons. So so it is because of the additional.

Yeah hauling distance.

All right I appreciate that and then finally just.

One last a kind of strategic question for for you guys.

Scott you went through a number of I've kind of bullet points with respect to the debt balance sheet liquidity and and not only where you stand in terms of a very comfortable liquidity position, but also you are adding to that with with free cash flow and oxy, we're continuing to ramp up.

I'm sure you're starting to get capital allocation priority questions I'm from from investors.

We're getting them with respect to all of our companies and and especially those that are they're building up more and more cash.

You raised your dividend, so there's a little bit there.

But then you also I think just.

I mentioned that neither of your to kind of pipeline projects are quite ready to make decisions on so so what are you telling investors with respect to capital allocation, what what happens to all this cash.

[noise] treatment or your question is a very apartment and very valid as I mentioned My board meeting yesterday and the we spent a lot of time talking about that some of the capital allocation.

Between we managements are having a strategy session about board in September and you can imagine that's the one of the key agenda item and <unk> capital allocation and you know what we're going to do this growing profitability the strong free cash flow space, especially if the strong gold price environment.

Continues so we recognize that as I mentioned only be done we don't see ourselves, making a construction decision not to organic growth opportunities. So capital allocations going to be a paramount, but Trevor I caught on it honestly I can answer your question because.

They were going to be strategizing on that with the board a in the month in September but obviously, if you will see kind of referencing shareholder friendly initiatives I would acknowledge that there is that suddenly potential there.

For us to be considering that that's about as much as I can say true I'm sorry.

No problem I think we'll well be anxious to see what what do you guys come up with.

Thats all I had thanks.

The next question's a follow up from Brian Macarthur from Raymond James. Please go ahead.

Good day, or Mcmanaman finance, but just want to clarify a couple things first of all in the 43, one a one are we going out the benefit of the permits that you just got at least a waste dump I.E. the benefits of the shorter hauls. Then you maybe what it had if you hadnt been able to use that going forward is that all going to be incorporated.

That's a study.

You mean I think it originally was but I wasn't sure what you were doing given that with a on certain situation [noise].

Yep, then don't take that please.

Absolutely, yes, where we've definitely incorporated that so we never really thought it was a uncertain the government would approve us going back, but we had to go through the steps to get to actually get the adjusted permits so from a safety angle from an environmental angle. So all those have been received we're gonna we're building off of our.

Of ours or end of June, possibly even the end of July actuals for 43, one on one so it or it will reflect everything that a as we understand it so going forward.

[music].

Great. Thanks, and I apologize to go back to the grades that are a cool toward because obviously you have flexibility with all the stockpiles there.

But I just want to make sure some of the benefit.

Positive reconciliation, but are you actually and you mentioned you had the blended to keep everything to get recoveries, but do you actually trying to manage obviously got to stockpile. Their gold prices are higher you actually trying to manage to the gold price here what their for taking a little higher grade at near term or is it purely just battle.

During the blending to get the recoveries or what you're doing.

Hi, Dan your I can take that but I just want to read the right. We are not manage to a gold price so more than anything Bonnie we had been seeing a positive grade reconciliation. Then you know I recognize when you look at our guidance becomes more and look at where we stand to dispose off this year that that was very well positioned in terms of what that could mean yeah.

Moving forward that.

Tens that guidance, we continue to maintain it you can continue medium had made any changes because I think we just wanted to be a you're very measured very measured in highway right youre guiding them off because there is uncertainty regarding the code that 19 pandemic that.

Definitely not managing to the gold prices are just being positive the stockpile to mill reconciliations does anything you want to add to that.

[laughter] suggests a ride we because we're feeding off stockpile over starting you know six months ago ongoing for another almost year. Yeah. We're trying to have a steady state maximizing our recovery really as is the greater focus.

Great. Thanks that what I, what I thought, but I just wanted to make sure. Thank you.

And there are no other questions I'll turn it back over for closing remarks.

John do when it goes the cool.

Yeah, that's a great Scott. Thank you all for joining us on the call today and I look forward to you know answering any further questions. So with that will wrap up the call. Thank you.

That does conclude the conference call for today, we thank you for your participation and you can now disconnect your lines.

[music].

Mm.

HM.

[music].

[noise].

Yes.

[music].

Greetings and welcome to the Centerra Gold's 2022nd quarter results conference call and webcast. During the presentation. All participants will be in listen only mode. Afterwards, we'll conduct a question and answer session and at that time. If you have a question you compress the one followed by the foreign your telephone.

If you're joining us by phone any need to reach an operator, you can press star zero.

And as a reminder, this conference is being recorded Friday July 30, Onest 2020.

I'd now like to turn out to Jon Petersen, Vice President Investor Relations. Please go ahead Sir.

Thank you operator.

I would like to welcome everyone to Centerra Gold's second quarter results conference call.

We have summary slides, which are available on Centerra Gold's website to come company. Each speaker's remarks on today's call is open to all members of the investment community and media.

Following the formal remarks, the operator, we'll give the instructions for asking a question and then we'll open the full line two questions. Please.

Please note that all figures are in us dollars unless otherwise noted.

Joining me today remotely is Scott Perry, President and Chief Executive Officer, Derrick Millman, Chief Financial Officer, Dan days, or Dan Chief operating officer, and use of Raymond Our General counsel.

I would like to caution everyone that certain statements made today, maybe forward looking statements.

And as such our subject to known and unknown risks, which may cause our actual results to differ from those expressed or implied.

Also certain of the measures we will discuss today, our non-GAAP measures. Please refer to our description of non-GAAP measures in the news release and DNA for a more detailed discussion of the material risk.

Assumptions and uncertainties. Please refer to our news release and Mdna issued this morning, along with the unaudited financial statements and note at our other filings.

Which can be found on CDR and the company's website that terrible dotcom and now I'll turn the Scott the call over to Scott Perry.

[noise], Thanks, John and good morning, everyone and thanks for dialing into our Q2 earnings conference call.

I hope and wish that everyone is safe and well during these extraordinary times of the cobot 19 pandemic.

So my remark I'm, just referencing slide five of our accompanying earnings conference call presentation deck.

Just looking at it to the bullet points the best Bullet point here, just where we got the cobot 19 pandemic, obviously, a extraordinary times I think we as a team of the company. We've been very diligent in terms of the preventative measures in the protocols, we put in place and I think it's been serving us well to the best about knowledge all three of the operations currently buyers for.

So you see that in terms of L. operating result, though levels of productivity et cetera. So generally speaking we've been a unaffected by the Coca times in Pandemics.

In terms of safety continues to be a primary focus for us as well as the Coca 19 pandemic, the the well being the health in the safety of out in places that a number one focus.

In terms of safety, we had a number of milestones in the quarter, but really one of the key notable ones those are offset a new operation in Turkey. Just recently achieved 3 million hours 3 million man hours of the lost time incident free operations, which is a fantastic milestones.

So the property and a full credit very expendable two elledge should team in Turkey.

Likewise, you can see here in the third bullet 0.1 of the key milestones during the quarter was aucs averages out new gold mining operation out food operation.

Actually declared and achieved commercial production during the quarter. This is being a I get that sounds has a milestone we pulled first gold in January and to be so quickly declaring commercial production thereafter, I think is very competitive.

In terms the operational results I think it is a great quarter to the company I can see here in the full full appointment produced just under 220000 ounces of gold and just doesn't 19 million pounds of copper was an excellent level.

Oh production and cost reduction.

Say that really resonates in the bullet points below where if I referenced last bullet point all in sustaining cost companywide was very competitive.

800 photos per ounce I think in Santa Clara emphasis there each of our operations, where each producing gold or lower than an all in sustaining cost of $700 per outside that come to 690 People's Brown's at Mt. Milligan 679, Ddos grounds that offset a very low cost at $537 per ounce, albeit exit.

Doing it sort of initial ramp up phase that already is the presenting as one of our lowest cost operations in our portfolio. So obviously in terms of profiling gold price environment makes for a very high margin business.

Hi moves in the next slide on slide six to two a address some of the financial highlights.

You can see the first bullet point here, just given that low all in sustaining costs, you know the high level of productivity and the high margins that I referenced earlier.

So that's really slowing for them to the bottom line profitability in or talk to free cash flow, but first bullet point here at a net earnings during Q2 was $80.7 million, which equates to 27 cents per share.

You look into the free cash with him into the second bullet point in the third bullet point. The cash provided by operations was it was very strong $268 million, but here in the third bullet point I think is is really the key takeaway. The business is performing really well just given the current gold price environment the level of production low all in sustaining costs and you can see that's really Brad.

Genetic intends to that free cash flow generation. So in Q2, when a company wide basis, we generated 160 969 during those positive free cash lately, but really I think one of the key takeaways me in for emphasis that's all about operations generating very meaningful positive free cash flows come to.

Our itself generated $157 million, a positive free cash flow Mount Milligan generated $34 million positive free cash flow and what I was most plays but as you know offset any just declared commercial production, but in its first sort of stub quarter of commercial production, that's already generating positive free cash like $5 million and I think this.

Yeah. This presents well in terms of where our business is going as we move forward get quarter over quarter, we're expecting meaningful progressive increases in production from offsets and that's going to put us in really good stead to see a growing free cash flows.

I mean other Turkey.

The fourth bullet point here, just given the strong with what profitability strong free cash flows you can see a one of the things that Darren out Chief Financial Officer has been very focused on eliminating older debt balance sheet and it now finished the quarter with a debt free balance sheet, which I think presents a really well and I think it's a very competitive balance sheet, right, which is our compared it to.

Groups that we finished the quarter with a net cash position and 212 windows and if you take into account now available credit lines. We now have a total liquidity of 712 million goes so very strong treasury position and obviously, a physician's out business very well moving forward.

The fifth bullet point here, we continue to maintain a guidance, which as you know originally issued at the beginning this year as I mentioned the outset, you haven't seen any meaningful impact into the Coca 19 pandemic. So.

We didn't were drawn out guidance would actually continued to maintain and reiterate that guidance.

And moving forward.

Let's look at point of reference here that dividend.

Shareholders May have noted that we've increased the quarterly dividend by 25% on a go forward basis going to be looking to maintain that quarterly dividend at a five cents per share.

Lessing I'll reference on this slide is just the the charts here the bought and I think it's just speaks to some of the the bullet points above that you just look at where our business is going and I think its a.

Scenario of the fundamentals of strengthening yeah quarter over quarter, just given the rising gold price environment, but we're also benefiting from a lot of the devaluation that this thing than they are local currencies in terms of jurisdictions every operates as well as the lower diesel fuel price environment. So the margins that were seeing enough business now I potentially the at the higher.

My son's that I personally have seen in the five years that I'd I'd thing or the company. So just looking at shouts moving from left to right. You can see control. We know we had a fantastic Q1, but in Q2 yeah.

It's been even better.

More than anything because of the high gold price, but you can see coming towards the quarter over quarter, increasing free cash flow.

Yeah, I $157 million in Q2, likewise at Mt. Milligan, you'll see the growth quarter over quarter that likewise offset against the down new operating mine in Turkey, and Im very pleased to see that already transitioning the positive free cash flow and as I mentioned earlier as we move forward over the course of this year, we are expecting a meaningful progressive quarter ever.

Quarterly increase in gold production, so that's going to.

Bode well in terms of with ARX <unk> profitability and free cash flow bids are going to be going here in Q3 in Q4, and then obviously you know it'll it'll resonates in the child there in the bottom line in terms of the company wide free cash flow again, I think that was a very competitive so that PLD peer leading level of free cash flow to the company generating 160 month 69.

Those are positive free cash flow.

Just maybe on slide seven.

You know again, focusing on the free cash like a theme.

To the chart here in the top left the typical waterfall charges illustrating.

The level of free cash flow that was generated by the operating mines. So you can see little three months together generated.

$294 million of free cash loans, because it's a six months into she is on a year to date basis and the red decrements in to see how we've been deploying that cash let's say the first decrement that obviously one of that key focus has been a you know eliminating.

Any sort of debt facilities, and then balancing as I mentioned earlier now finished the quarter with the debt free balance sheet.

It seems also being.

Distributed $17 million in terms of dividend distributions and then you can see there are many big especially about developers its corporate general and exploration.

I referenced a child in the bottom left again I've spoken to these numbers positive free cash flow, but whenever I'm forgetting as China I like to talk to a 2019.

When you look at Q2 Q3 Q4, you can see the level of positive free cash. So they were generating on a companywide basis was.

Relatively modest but you can see the significant step up that took place in Q1 2020.

So what I like the references in 2019, obviously the company, we're very focused on the construction of offset and so what are the positive free cash flow generating from whom turn Mount Milligan, we're using that free cash flow to finance, the construction and offsets, but as we exited 2019 construction was essentially pretty close to being complete.

They can see the immediate step up in a positive free cash flow in Q1.

2020 that step up you know, it's even more pronounced when you look at the Q2 result of $161 million it probably free cash like because obviously offset in their long and construction is now transitioned into operations with quick mission production and as you saw an accident year results offset was actually generating positive free cash flow. So again I think.

This puts us in a really good stead bodes really well what we can expect in terms of Centerra is a go forward profile as Alex it's going to be increasingly contributing.

Meaningful positive free cash flow and again this puts us in really good stead as we move forward again and a lot splendid references I realized gold price during the quarter was just as a $1600 per ounce. Obviously, we're in a much stronger gold price environment as we speak. So if that does continue again, just bodes really well for wear out profitability in public free.

Cash flow is going.

The bottom right speaks to the debt free balance sheet as I spoke to earlier I see year over year. He was being very aggressively paying down debt and that is now successfully a cheap debt.

Debt free balance sheet, and finishing the quarter, the net cash balance up $212 million.

With that I'm now going to look to pass the call over to 10 days Iden is that Chief operating officer, and then we'll expand a bit more and some of the operational highlights so Dan please.

Thanks Scott.

Good morning, everyone. Please please move to slide nine.

Our Q2 operational highlights start with safety and we have a number of highlights in April both come mess and Oct suit both achieved a one year lost time injury free.

At Couture, where you have 900 contractors, they've just achieved two years without a lost time incident.

And then in July at OCC sued the 1100 strong workforce, there had 3 million man hours without an LTI.

This is a majority of these hours work during the very difficult winter, we had through construction and with all of the majority of new employees. So we feel very very proud to have that operation.

On the production front, we had a very strong quarter Oh, we produced 219692 ounces of gold and 19.1 million pounds of copper at an all in sustaining cost.

$804 per ounce sold.

In terms of the Q2 results by operation.

Tore continues to produce at a steady rate, we're blending the cutback 19 or feed from the stockpile.

In the quarter, we had a recovery rate of 84%, which was very strong.

On the Colvin front in Kurdistan It was substantially under control in April and May.

In the country due to strong measures taken by the government. Although recently there has been a large increase in cases in Kurdistan.

Due to the remoteness of our operations. The company is able to testing quarantine employees and contractors that are off site quarantine facility before going to the mine site.

This has allowed us to the best of our knowledge.

The property virus free.

On the operating supplies, we've built up a in case of interruptions and we do have strong support from government to continue operations.

Coombe tour in a second quarter produced 173245 ounces.

That's what they poured at an all in sustaining cost of 696.

The slight did have some large capital equipment purchases in the quarter and will benefit from that long into the future.

We finalize their new design for the Lisi waste dump in the quarter.

Taking into account all the learning lessons from the tragic failure that we had.

This was submitted to government in the quarter and just the past week, we did receive a approval from the government to return to the lease you waste, Tom, which we'll see us get back up to a planned tonnages.

For cutback 20 in Q3, given the the benefit from the haulage profiles, the reduced haulage distance and the resulting efficiencies.

Come toward generated 156.9 million free cash flow in Q2 and that drag brought our year to date free cash flow to 253 million.

Taking into account be successful drilling campaign of 2018 2019 commentary is on track to release, an updated 40 311 Technical report this fall validating that its mine it really is a tier one mine.

[noise] shifting over to Mount Milligan Corbett in Northern British Columbia is very much under control. We continue to keep a strong disciplined according to government guidelines, which has helped us run at full capacity since late may.

We did have two weeks, where we shut down the mine, but we also brought the mill down for a full maintenance shut in April.

Which set the site up for success and we've been able to run that our full complement of employees sense.

The we achieved a throughput average in the quarter or 48000 tonnes per day.

Which reflected a planned shutdown for the mill that we did.

But we also achieved a record throughput tonnage mark in June exceeding 63500 tonnes per day, along with excellent recovery of both copper and gold.

So in the quarter Mount Milligan produced 35.

<unk> thousand 656 ounces of gold and all in sustaining costs of a very strong 679, and it produced a 19.1 million pounds of copper.

On the process water topic.

We had a very wet spring a and it's been continuing to be cool and wet so we have ample water to run at full capacity.

At the end of June we had 6 million cubic meters of water and inventory and that's continued to build so we continue to pursue medium and long term solutions that will give us ample water.

No impacts on operations.

Milligan generated $34 million and free cash flow in the quarter and 56 million for the year.

At our OCC suit, our new our new mine as Scott mentioned first goal poor was at the end of January.

We achieved commercial production May 31.

Covance situation in Turkey is stable as a country executed a full control opening in April 15, our mine has been operating a it did have two weeks of interruption for the first two weeks of April, but there's been little to no effect on operations since that time.

Gold production front. So we did 10791 ounces for the quarter had an all in sustaining cost of 537 per ounce.

For one month of commercial production.

Even as we continue to operate ramp up the operation generated 13.5 million in cash from operations and 5 million free cash flow in the quarter.

Go over to slide 10, we can talk about our operational key focus.

For 2020, we continue to focus on improving our safety performance, we've engaged some subject matter experts and adjust ourselves to improve our controls, especially of key risks.

Talk suit, where you have ramped up commercial production in mind tons crushed ore placed on the heat energy our plant is running as design.

Subsequently the heap willing keep increasing its leaching of ounces as per our plans.

By the end of Q2, we did have 1.2 million tons stacked on the heat under irrigation and a large ore stockpile waiting for crushing and placement.

For 2020 Mt. Milligans team is focused on achieving consistent and improved mill throughput and recovery and is getting a stronger handle on the plant mechanical availability.

The operations team also is taking steps to improve its cost performance throughout the company. We are taking advantage of this lower commodity pricing to build or inventories at Mt. Milligan, we have flattened organizational structure.

Weve scrutinize, our rentals and all call contracts as well as improving a mine productivity.

Cool door is on track to deliver its updated 43 101 in the fall of 2020, I will be converting a meaningful portion of our measured and indicated resources into reserves and showcasing and extended mine life.

Finally, we continue brownfield exploration, where the planned $32 million investment company wide, including 20 million had come tore.

Move over to slide 11.

This is a graph of our water inventory in the TSS and as you can see we have such a substantial inventory as compared to the levels at the same time in the previous three years.

On slide 12, these are photos of Oxford.

Though including last Fall's mining heap Leach pad and facilities as you can see there's a there's blue sky over the site.

Now I'll turn the call over the down.

Thanks, Dan and a morning, everyone.

Following on now.

Acidic I'm on slide 14.

Centera recorded 412 mean in revenue during the quarter.

This consisted of 346 million in gold so.

What do you mean in copper styles, and 26 management molybdenum business unit.

During the quarter. The Companys average gold crush realize was 600 1600 $20 per ounce and $2 and six per pound copper.

In the quarter, we sold 217000 ounces of gold 170000 ounces attributable to come to our 35000 ounces from Mt. Milligan in 12000 ounces goat 12000 gold ounces being sold at Oxford.

As previously mentioned, but Scott and Dan, Oxford achieved commercial production on my 30 coast.

In comparison.

So probably you caught up.

Gold ounces sold had an increased by 10% and a seven 7% increase in comparison to the first quarter of 2020.

We saw 19.3 million pounds of copper a slight increase in comparison to the prior year quarter.

I just move out of Islam thing.

Net earnings of 80.7 mean was recorded in the first quarter.

This included a 17.1 million noncash adjustment to close so I quite close side asset retirement obligation.

The expenses associated with the movement in the underlying discount rates with reference to U.S. and Canadian Treasury Bond rights. There was no change to the underlying activities required to remediate the properties.

The adjusted earnings after excluding the noncash <unk> spend was 97.8 million.

The adjusted earnings per share for the quarter was 33 cents.

From a consolidated cost perspective, centera in the quarter production costs were $410 per ounce and all in sustaining cost at $804 per ounce.

At an asset level control recorded all in sustaining costs of $696 per ounce well Mount Milligan recorded an all in sustaining costs of $679 per ounce for the quarter.

For the month of June Oxy recorded all in sustaining cost at $537 per ounce.

I'd Ola operations recorded significant betemit in cash provided by operations.

I'm told recorded $220 million in cash from operations, a 138% increase.

Milligan recorded 42 million.

For a 158% increase from operations with oxy contributing 13, meaning the quota.

This translated to 160 mean mean dollars in consolidated free cash flow for the quarter with up to delivering five mean discrete tax side, while steel in the early phase that ramp up.

Year to date, the company generated 246 million in free cash flow.

As noted in the bottom left hand title since here with all of its debt and finish with 1200.

212, meat and cash 712 media titled liquidity.

On slide 15, it also refer you to the bottom right and shop.

Year to date. The company has produced 410000 ounces of gold tracking very well to achieve go to achieve guidance as opposite ramps up in the second half with 2020.

Cost you today also tracking well with all in sustaining cost at $804 per ounce below the current guidance range.

In the second half of 2020, the company expects to come to will process more lower grade material than in the first half. The 2020, but also expects an increase in production from Oxford mine the off seed money as it continues to ramp up it's called production.

Full year gold production guidance to 2020 is being maintained between 740000 ounces to 820000 ounces for the year.

Year to date, the company's sneak 166 mean on capital expenditure slightly below target with the remainder expected to being code in the second half is the year.

Total capex for 2020 is guided to 415 mean.

Given the financial strength of the company and free cash flow generation now from all three mines Centera bought increased quarterly dividend to five cents for the quarter at 25% increase and it's expected to be at these consistent level quarter on quarter, while still subject to regular bulletin board approvals with that.

I'll pass it back to spoke.

Thanks, Darren and the outlook I'll, just look to wrap up the presentation here on slide number 17, just referencing the the top left quadrant here just a couple of bullet point when a reference obviously the first bullet point as Darren just spoke to this is that guidance and just gives you a different appreciation crouse go tens of a gold output that mantegna she has been talking.

820000 ounces of gold and all in sustaining costs as low as $820 per ounce.

Obviously in the prevailing gold price environment. This is going to present, very well and sometimes it out profitability and ongoing on free cash flow generation potential.

As we've referenced here throughout the deck you know the second bullet point here, we had a very strong competitive quarter good level goat output and again at a very competitive all in sustaining cost that obviously, a really resonated here in the fed bullet point, you'll see that flowing through in terms that profitability and free cash flow generation I think the peer leading result in terms the quarterly free cash flow generation.

The 106 $9 million.

Both bullet point, you can see that in terms that would be in deploying that cash been very focused on a.

Presenting a a debt free balance sheet would now achieved that here in Q2, finishing the quarter. The net cash position those that $212 million and if you take into account now available credit facility capacity as Darren mentioned, we have over $700 million.

Total treasury liquidity.

Certainly in a internally funded business model.

Moving forward.

The fit bullet point, yet just in terms of the dividend.

Darren just mentioned there the board declared a 25, just an increase in a quarterly dividend increases of five cents push or per share.

As a quarterly dividend that we expect to be a maintaining a moving forward in the last bullet point. He had been spikes in this area everything we continue to be on track.

Releasing a come towards new 43, one or one life of mine a technical report we're targeting to release that in the fall on this year.

And with that study when looking to that.

Meaningful portion of the measured and indicated our results increase that we announced back in March this year, so looking to convert a meaningful portion of that tourism category and that's going to allow us to.

Showcase a a meaningful expansion and controls to the delineated asset reserve life moving forward.

Tend to the chart here in the top right.

But in excess of the $1.1 billion of positive retained earnings and if you just look at the history, there and since the Blue segment on these columns within this chart you can see some terras.

Very good history in terms of the profitability, obviously growing that retained earning pounds, regardless of whether being in the prevailing gold price cycle, which is illustrated by the Red line shot and then what I think there's one of the key takeaways from the quarter is the charts in the bottom. This slide you can say in each of though operations being producing positive free cash flow, but what I.

I'm very pleased with business when you look at the quarter over quarter progression at each operation or operations is showing very meaningful improvements in profitability in that positive free cash flow and that reflects the underlying productivity the underlying cost efficiency, but also just the benefit of the Hyatt gold price environment that went benefiting from and.

As Darren mentioned that offset we're expecting a meaningful congrats it increases and the gold output profile from offset so again thats going to potentially present very well in terms of wear out profitability at free cash flow generation is going in the out in the back off the second half of the shifts.

With that I'll look to wrap up the presentation that but what I'd like to doing now pass the call back the operator and we can.

Moving to a cure a nice session operator, if I can possibly you. Please.

Certainly if you'd like to register question you compress the one followed by the forward and telephone and you'll hear a three tone problem to acknowledge your request.

I'd like to withdraw your question you can press one three.

And again that is 140 queue up.

And the first questions from line of price Adams from CNBC is good.

Hi, Good morning, Scott and thing Thanks for taking my questions I have to operational questions.

Firstly, the big Guy that come to coming from the stockpile, though where a tick on the full grams per tonne and the stockpiled override is 1.8 grams a ton my understanding in that context. My question is how long is that elevated right profile sustainable and what's the grade outlook for the second half.

Thanks.

I'll give that quoted that sorry give you a question too are gone out chief operating officer.

Dan do you want to touch on that just in terms of the different categories and stockpiles. We have in some of the 1.8 Grand Prize touched on but also maybe to speak to some of the positive grade reconciliation that was saying on the high grade in the medium grade.

Absolutely okay. Thanks, Bryce it's good question.

First we have a large stockpile I'm actually in our life of mine plan. It until we see that we end up milling for a couple of years. After the end of the mine life. So we we do have a very large low grade so stockpile set aside our cut off grade as a 0.8.

Of the Graham so so when you see the averages the 1.8, that's the averaging over the whole thing so our second half as Darren indicated we will be the lowering the grade a slightly but were blending both our high grade medium grade and or whatever amount of our low grade that we want to put in.

In order to maximize our recoveries and then make our plans through to the end of feeding the stockpile. So so to answer your question, we will still be will be lower than the second quarter. That's our current plan right now, but we have a lot of flexibility depending on how much of our are very high grade.

Scott alluded to also we've been seeing some very good positive grade reconciliation is in our and our high grade stockpile.

And and that we anticipate that probably to go forward, but we don't.

We don't budget for that.

So those are additional analysis, we ended up getting on a regular basis.

I think I got it so for the second half you think it would normalize back to sort of Q1 levels is that a good.

Got to use.

We were targeting guidance, we're still believe we're going to be within guidance. So yeah.

It's certainly back closer to the to the quarter one yeah.

Got it my second question right to Mount Milligan unit costs, So 2020 cost per ton for mining and milling continue to demonstrate significant improvement over the 2019 levels. How could you touch on and remind me what the the key drivers off of that cost improvement.

[noise] well whatever that's good question, Scott I can take the swine.

First of all our new General manager for me he's been there. Your in house goal has been doing an excellent excellent job just looking for efficiencies and we brought in different experts to do that so it's on.

But they've they've also benefited from the the lower diesel fuel price, which is one of our major cost drivers.

And he's flatten his organizational structure. So some of the labor costs are down so you know and overall.

He sees found some efficiencies in mining. So we were anticipating a continued benefit on them on the mining side.

And to have significant is the Canadian dollar for those unit costs.

Did not not highly unless it's affected by the the oil price all or labor costs, there and you know we buy.

Pretty much hundred percent locally so.

Got it okay. That's it domain, thanks for taking the questions social events and just.

Thanks.

The next questions from line of Dalton Bretaa from Canaccord Genuity Scott.

Thank you good morning, everybody.

I'd like to talk a little bit about this out cobot situation that seems to be escalating in Pakistan and potentially around controller.

More specifically I'm trying to understand the implications on.

2021 production profile, so any year to date, you've only mind 585000 tonnes of ore and that's that's been a function to haul distances and so on but if you're going to be third tailing rates going forward to keep the headcount down yet what are the implications for 2021, I mean, what's the plan to keep them outside there.

I think built and I'm, Dan you want to address den kind of it you addressed debit then just also touching the fact that will never scheduling to mind any all of this year and exclusively on waste running but then I'll positivity.

Yeah. Thanks, Thanks Dalton very good question, yes, we have been a effective doner to our total mine tons, but mostly due to our terrible incident in lisi, which caused us to after hall from cut back 20, which is our we're very high up in a in one ridge down to our central Valley, which greatly extended our whole.

Distances.

Another complication that we've been having that we're getting through now is much of that whole distance is out of the maximum.

10, a 10% grade.

And during the past few months. This is our snowy season in the spring and so what we've we've lost some time just from weather conditions slippery slippery conditions. So we we believe we're coming around the corner now now that we've.

No that we've.

Got our permits to go back and Lisi and we've also come down quite a ways on that caught back up more than 100 meters down.

So a do it where we're looking looking much better.

The implications are right now we were not going to be a mining any or in the remainder of this year and very little in the first two quarters of of next year. So it's all about the release of or what we've done as we've looked at our mine plans and we'll see drilling results. We have adjusted our mine plans. So we're really seeing substantial.

Police similar ounce production for 2020 with our actuals that we know up to today as was in the the original on a 43 one on one life of mine plans that to that is public.

That does so honestly.

Sorry.

And then the misspoke little bit when he said, we're seeing a you know.

Just a level of production in 2020, I think dens, referring to 2021. The success. We've had an yeah. I started to result in what have you, yes, Weve tends about mine plan, which has dropped right now be releasing that in the fall this year, but in terms that have recalibrating that we are seeing or similar level of gold production in 2021, which is.

Similar all consistent with what was in the original 43, one on one so that exploration success that has alleviated any challenges that we may be facing right now in terms of mining productivity levels.

Okay, Great. So 2021 production isn't that the rest of sites that you, maybe mining last or now or less yet.

Correct.

No it had nothing and I'm being repetitive I apologize, but in our original plans. This year will notice we run even scheduled reminding any all the plan always so this year, even pre pandemic flu going to be exclusively treating all from al stockpile inventory and tens of that mining activity with exclusively focused on.

Waste money.

Correct.

Right now I understand that but I you know I'm, just wondering where the ore from 2021 will come from so that's all sulfide ore as well.

So the first to the put off of 2021 is from stockpile ore and then as we sort of increasingly move into late Q3, Q4, then it will release them all summer cut back 21.

Understood. Okay, and then just maybe one more question on the.

That issues and the impact on your workforce. There is that is that a function of you actually catching it for the mine gate and quarantining people or are you actually seeing absenteeism up as law, just given increasing rates.

And then you want to take a quick.

I'd be happy do yes, well it there is a little bit of absenteeism due to all of a family stresses when obviously when when family members are affected a either moderately or severely we can have people, calling in and and being sick, but a majority is that on our screening process, where we're very.

Very strict we for most of up until now. We then we still do now we test people twice.

And so that's picked up a lot of positive cases, and because of that if they were corn teamed with other people. Those other people even will go off for two weeks longer because they had exposure to someone who's tested positive. So we've been very strict.

Which did have done effect.

Some of our crew changes because we anticipated circa 30, 40 people coming up and and if one or two as one was positive then all all 45 for example, so we've adjusted our strategies since February two a you know accounts for the different changes but.

But so we're we're feeling positive we continue to feel positive that we can operate through this time and.

We're getting great cooperation from government when we've had different challenges.

Okay, Great just maybe one last since may bounce back in queue. So I don't see I understand the the leach kinetics, but year to date, you just 19% of the low end guidance not production perspective is that in line with your plants and like you were thinking.

And I couldn't use those I think what I've being representing two the investment community is that.

Secondly, it was sort of speaking the capital markets investments renewed Q2, as I said, you're going to see that Q2 production will be double what we achieved in Q1.

And then here in Q3, again, I'm expecting that will be producing more than double what we produced in Q2.

For example, if you look down guidance you'd be expecting us to be producing sort of an excessive 10000 ounces per month here in the back half of this year and I can confirm that we've already already achieved that level or run rate here in the lumps of July at offset so it's going to be a very meaningful.

Aggressive ramp up in gold production is progressing well.

That's great. Thank you guys I'll jump back in Korea.

The next questions from the line of much alone in from Bank of America. Please go ahead.

Oh Morningstar and everyone.

Got a question on great installing Scott.

I'm sure you noticed a I am gold moving ahead with co take all.

Here's a 1900 dollar gold price further IR, which was interesting.

Hi price just wondering what Oh gold alert air.

What's the status for its project is Ah Ah. Thanks.

And it looks like Michael the question.

No change inside they did both about organic growth projects. We obviously have to commence project in British Columbia, and then we have the greenstone joint venture per day hearing on in Ontario.

In terms of the the economics that we've been looking at in terms of out prior.

Economic assessment from come out perspective.

Al boardroom setting.

We're not seeing a value proposition are ready to retire that would compel the board to to make the proceeds decision or construction decision.

And that that continues to be the case, so as I look at a.

Cost of this year and moving into that next year and that consistent route guide and.

I present latency is making a construction decision on either about.

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Okay. Thank you.

The next questions from line of Mike Parkin from National Bank. Please go ahead.

Hi, guys. Congrats on a really solid quarter odds wondering for you you mentioned, you're continuing to progress on all long term water.

Solution for Mt. Milligan, certainly major milestone that we should be watching for in the back half the year.

Usually do you want to do you want to address that.

Sure Scott.

In terms of milestones.

I wouldn't say, there's a milestone we are having a formal application and we expect to.

Some more details materials in analyses to support all the water sources that we're looking for.

But in terms of milestones I don't I don't see.

Anything on the long term, it's taking a long and but as you can appreciate your time.

Oh relatively long process in terms of consultation with regulators and this nation. So.

It's not all I can say on on the long term, we are looking at potentially extending current medium term water sources that we have.

But again, that's all that's all part of the process.

Okay.

And then just one other follow up to Bryce. This question on the grade performance.

Kim tour in the second quarter can you tell us what your internal budget was I just have a sense of like what that positive reconciliation.

Dr Wise.

[laughter].

I don't think I can Mike as a matter of fact, if I try to never quite what our internal budget numbers, though because you can imagine budgets are always more of a stretch target relative to guidance, which is somewhat discounted.

No I'd be able to position disclose that Mike.

All right just happy to see that it continues alright, well, thanks, very much and congrats on the core thanks.

The next questions from line Trevor Turnbull with Scotiabank. Please go ahead.

Yeah. Thanks, maybe just a quick kind of housekeeping question on on the Corona virus related.

The questions you addressed a minute ago I was just wondering does decreased Republic have any sort of travel restrictions that makes it hard to either bring in people that you need us consultants for whom tore or even people on rotation that are trying to come in from other countries and just how are you addressing that.

Hi, Dan you want to take that please.

Yes, very happy too.

Yes, certainly since the beginning decreased government Uh huh.

Greatly restricted a regular flights.

They did repatriate a lot of there.

Nationals from our own around the world and that's really what brought the virus in.

In terms of the government made it clear.

More than two months ago that any any mining company or business that required.

There are ex pats to come in the they approved that but we have not taken advantage of that we did not want to be contributing to any increase. So we've we've dramatically decreased the number of ex pats that we have in country.

But we've learned very well to manage from a distance and just as we have been hit doing here in Canada and Toronto.

So we don't see any effect right now on that in terms of consultants. We have had some small delays in a few of our capital projects, but we've been now been able to bring in the consultants require required for both the a different construction capital projects. So we have and we've had defined.

You know different a different ways to be able to complete or 43, one on one and I have all the consulting sign off support. So so we're we're looking okay in terms of our shift changes et cetera.

We've extended our stay at the mine site, which just makes it easier to do the screening.

But we've been able to shift in and out people us as we require.

Okay. You just mentioned the 43, one on one and you've said that's coming out this fall any tighter tight I mean can you tell us that that's going to be Q3, Q4, any sense of better timing on that.

Dan why don't I take that.

Trevor I don't think we can give you any specific.

From a timing on that we set a board meeting yesterday, obviously and you intend to discuss the board.

The board wants to make sure that we producers that are very high quality product just giving.

Given what we've been a referencing and we still don't have a steep climb on in terms of when they're going to cope with the board and the board meeting et cetera. So I don't think they can address that question.

Okay.

Then the other thing I wanted to ask about to come tour and with respect to the new trucks and they increase to the fleet.

I think you said there was 11 trucks getting added what does that kind of work out too in terms of increased haulage capacity that you've got.

Compared to the existing fleet.

Dental that you'd say that please.

Yep no no problem, so our existing fleet.

It's just it's was just shy of 100 trucks or two thirds being a seveneighty lines. How we're we're adding we're look to be weve, adding 11 here so that would be a on the adding about 10% to our capabilities and then we'll we'll be adding additional equipment most likely in as we move for.

And we'll see a 43 one on one.

And.

With respect to those those trucks, obviously it it increases your ability.

It tend to move everything but.

You are also.

Facing some of these issues as you alluded to earlier with the with the relocation of the way stump is if some of the new fleets excess capacity is that actually getting.

You know is that is that a way of mitigating some of the longer haulage distances or is or is that truly all say, 10% increase in in capacity or if some of that eroded by by the longer haulage distances.

Yes, certainly you're correct.

So some as we are planning to move more tons per year, but but not not 10% more tons. So so it is because of the additional.

Yeah hauling distance.

All right I appreciate that and then finally just.

One last kind of strategic question for for you guys.

Scott you went through a number of I've kind of bullet points with respect to the debt the balance sheet liquidity.

And and not only where you stand in terms of a very comfortable liquidity position, but also you are adding to that with with free cash flow and OCC suit continuing to ramp up.

I'm sure you're starting to get capital allocation priority questions from from investors.

We're getting them with respect to all of our companies and especially those that are they are building up more and more cash.

You raised your dividend, so theres a little bit there.

But then you also I think just.

Mentioned that neither of here to kind of pipeline projects are quite ready to make decisions on so so what are you telling investors with respect to capital allocation, what what happens to all this cash.

[music].

But.

Your question is a very apart and very valid.

As I mentioned, we thought board meeting yesterday, and the we spent a lot of time talking about that some of the capital allocation.

We we managements, having a strategy session about board in September and you can imagine thats. The one of the key agenda item is no capital allocation and what we're going to do this growing profitability is as strong free cash flow spec, especially if the strong gold price environment.

Continues so we recognize that as I mentioned earlier, we don't we don't see ourselves, making a construction decision not to organic growth opportunities. So capital allocations going to be a paramount, but Trevor I count on it honestly I caught answer your question because the theyre going to be strategizing on that with double it a in the Memphis.

But obviously, if you're kind of referencing shareholder friendly initiatives I would acknowledge that there is certainly potential there.

For us to be considering that that's about as much as I can say true whose aren't.

No problem I think we'll well be anxious to see what were you guys come up with.

Thats all I had thanks.

The next question's a follow up chrome Brian Macarthur from Raymond James. Please go ahead.

Good day.

And credit has been answered just wanted to clarify a couple things first of all in the 43, one or one.

Are we going up the benefit of the permits that you've just got at least a waste dump e. the benefits of the shorter hauls than you may be what it had if you hadnt been able to use that going forward is that all going to be incorporated into this a study.

When I think it originally was but I wasn't sure what you were doing given that with a on certain situation [noise].

Yep and then take that please.

Absolutely, yes, where weve definitely incorporated that so we never really thought it was a uncertain the government would approve us going back, but we had to go through the steps to get to actually get the adjusted permits so from a safety angle from an environmental angle. So all those have been received we're gonna we're building off of our.

Some of our our end of June, possibly even the end of July actuals.

For the 43, one on one so it or it will reflect everything that as we understand it so going forward.

Great. Thanks, and I apologize to go back to the grades at a cool toward because obviously you have flexibility with all the stockpiles there.

But I just want to make sure some of the benefit.

Positive reconciliation, but are you actually and you mentioned you had the blended to keep everything to get recoveries, but do you actually trying to manage obviously got to stockpile. Their gold prices are higher you actually trying to manage to the gold price here, what therefore ticking a little higher grade at near term or is it purely just.

Balancing the blending to get the recoveries or what you're doing.

Hi, Dan your I can take that but I just want to reiterate we are not manage to the gold price more than anything Brian we have been seeing a positive grade reconciliation then you know I recognize when you look at our guidance the cold interim look at where we stand to the sets off this year that very well positioned in terms of what that could mean then moving.

So would that.

Is that guidance, we continue to maintain it continue we have made any changes because I think we just wanted to be very measured very measured in how we're guiding them off because there is uncertainty regarding the code that 19 pandemic, but.

But definitely not managing to the gold prices just being.

The stockpile to know reconciliation Dan has anything you want to add to that.

Scott So right, we because we're feeding off stockpile over starting you know six months ago ongoing for another almost year.

Yeah, we're trying to have a steady state maximizing our recovery really as is the greater focus.

Great. Thanks that what I, what I thought, but I just wanted to make sure. Thank you.

And there are no other questions I'll turn it back over for closing remarks.

John do want to close the cool.

Yeah, that's a great Scott. Thank you all for joining us on the call today or in a look forward to.

Answering any further questions so with that will wrap up the call. Thank you.

That does conclude the conference call for today, we thank you for your participation and you can now disconnect your lines.